Net foreign direct investment (FDI) inflows to Saudi Arabia rose 5.6% to 9.5 billion riyals ($2.53 billion) in the first quarter of 2024, according to government data released on Sunday.
This marks a slight increase compared to the same period last year, where inflows were up 0.6% to 17 billion riyals.
Meanwhile, FDI outflows saw a decrease of 5.1%, amounting to approximately 7.5 billion riyals.
Saudi Arabia aims to attract $100 billion in FDI by 2030 as part of Crown Prince Mohammed bin Salman’s broader strategy to diversify the economy away from its heavy reliance on crude oil exports.
This ambitious target is intended to boost the kingdom’s non-oil gross domestic product, a crucial element of the country’s economic vision for the future.
Earlier this month, more than half of the shares offered in Saudi Aramco‘s (2223.SE) $11.2 billion secondary share sale were purchased by foreign investors.
The involvement of foreign investors in this significant transaction underscores the kingdom’s ongoing efforts to draw substantial foreign investment.
Saudi Aramco, the state-owned oil giant, has played a significant role in lifting FDI figures in the past.
However, even with substantial deals involving the company, the kingdom’s FDI levels have fluctuated and remained below the 2030 target.
For instance, FDI peaked at $32.8 billion in 2022 but dropped to $19.2 billion last year.
Saudi Arabia’s strategic push to increase foreign investment is a central component of Vision 2030, a plan aimed at reducing the kingdom’s economic dependence on oil by fostering growth in other sectors.
The recent FDI figures indicate progress, albeit gradual, towards achieving this vision.
The involvement of foreign investors in major deals like Saudi Aramco’s share sale is a positive sign, yet the kingdom must continue to implement reforms and create an attractive investment climate to reach its ambitious $100 billion FDI target by 2030.